World Bank: Investments in People Critical for Future Growth

Decision makers along with representatives from civil society and the private sector from Algeria, Egypt, Libya, Morocco, Tunisia, and other Middle East and North Africa (MENA) countries will convene today in Tunis to debate the findings of two recently-released World Bank reports that call for more investments in people to prepare for the economies of the future. The reports argue for greater investments in health and education, and more effective social protection systems, as critical for adapting to the changes caused by disruptive technologies and seizing the opportunities they create.

The event, chaired by the Head of Government of Tunisia, Youssef Chahed and the World Bank Vice-President for MENA, Ferid Belhaj, will aim to engage in an in-depth conversation around an ambitious roadmap to upgrade education and training outcomes. The 2019 World Development report (WDR), titled ‘The Changing Nature of Work ‘ shows that digital technologies are driving the demand for advanced cognitive skills, socio-behavioral skills, and adaptability in labor markets. The digital economy, particularly through platform firms, also presents an opportunity to create the conditions for more jobs. The ride-hailing app Careem has grown into a billion-dollar company and created jobs for thousands across the region. As location is less important for platform-based firms, they offer opportunities for people in less developed areas. However, countries in the region will need to expand access to broadband and digital payments to ensure everyone has access to technology to unlock the opportunities offered by a global digital economy.

The report also features the new Human Capital Index, released last October in Bali, which provides countries with a way of measuring the impact of their investments in the health and education of their populations on future productivity. MENA countries performed poorly compared to peers, due in particular to weak learning outcomes.

‘Even though MENA countries have been spending large shares of their budgets on education and have achieved remarkable progress on boosting access, students are graduating without the skills in demand by the labor market. University graduates are now more likely to be unemployed than people with lower qualifications,’ said Ferid Belhaj, World Bank Vice-President for the MENA region. ‘The World Bank strategy for MENA focuses on helping equip the youth of the region, those of today and tomorrow’s youth, so they can reach their ambitions and contribute to the sustained and virtuous development of their countries.’

The new flagship report titledExpectations and Aspirations: A New Framework for Education in MENA calls for curricula to shift away from memorization and rote-learning, to focus more on the skills prized in the new, digital economy, such as critical thinking and problem solving. By incubating new skills and promoting innovation, Education can be an important catalyst for growth. To achieve the full potential of education, the report calls for a new framework that combines a stronger push for learning, a pull for skills, including teachers’ skills, and a pact that unites all segments of society behind the necessary reforms.

According to the WDR, if countries improve their education systems and create an enabling environment for digital innovations, disruptive technologies can be a strong driver for growth and job creation. To achieve this potential, however, social protection systems will have to adapt to the changing nature of work. New forms of protection will be needed as people change jobs more frequently and learn new skills. Employment in the digital gig economy is characterized by inherent flexibility, but also the absence of standard employer-employee contracts and traditional social protections.

‘Irrespective of technological progress, informality will remain a predominant feature of the region’s economies. Around 70% of workers in Morocco and 60% in Tunisia remain in low-productivity informal employment with little access to technology and no social protection. Expanding access to technology and adapting social protection systems would help countries address today’s problem of informality while adapting to prepare for the economies of the future’ said Marie-Françoise Marie-Nelly, World Bank Country Director for the Maghreb and Malta.
Source: World Bank Group